Commission Agent Eligible for Full TDS Credit u/s 194Q | ITAT

Case Details: Sri Lakshmi General Stores v. Income-tax Officer - [2025] 180 taxmann.com 260 (Visakhapatnam-Trib.)

Judiciary and Counsel Details

• Ravish Sood, Judicial Member & G. Manjunatha, Accountant Member
• GVN Hari, Adv. for the Appellant.
• Dr Aparna Villuri, Sr. AR for the Respondent.

Facts of the Case

Assessee was a licensed commission agent operating in the Agricultural Market Committee Yard in Andhra Pradesh. The assessee received 2% commission from farmers on sales to purchasers/traders/exporters. The same had been reported as income in the financial statements, and taxes were paid accordingly.

During the relevant period, the buyers/traders/exporters deducted TDS under Section 194Q in respect of the total sale value and reported it in the PAN number of the assessee. Similarly, the buyers/traders/exporters had deducted TDS under Section 194A in respect of interest payments on delayed payments and reported it in the PAN number of the assessee.

Since the assessee considered only commission income as its taxable income and, after deducting relevant expenditure, offered a net profit for taxation, it claimed credit for TDS as deducted by the traders in terms of sections 194Q and 194A. The Assessing Officer (AO) allowed a proportionate credit for TDS on the grounds that the assessee had offered only part of the income, whereas it had claimed TDS on the entire sales value. The aggrieved assessee filed the instant appeal before the Tribunal.

ITAT Held

The Tribunal held that the assessee was entitled to full credit of TDS under Sections 194Q and 194A as per Form 26AS. There was no dispute that the assessee was a licensed commission agent. As per AMC regulations, the assessee received 2% commission from farmers on sales to purchasers/traders and exporters, which was reported as income in the financial statements and paid the relevant taxes.

Since the law provides for TDS under section 194Q on the total sales value, and further, the assessee raised sales invoices in its name, the traders deducted TDS on the entire sales value. However, the assessee considered the total income accrued on the total sales value to be commission received from the farmers as its income. Therefore, the entire income pertaining to TDS deducted under sections 194Q and 194A has suffered tax in the hands of the assessee.

Therefore, the AO’s contention that the assessee has offered only part of the income, whereas it claimed TDS on the entire sales value, was incorrect. The assessee was rightly entitled to claim full credit of TDS as per Form 26AS and not merely proportionate to the income offered in return.

List of Cases Reviewed

• Bala Krishna Traders IT Appeal No.302 (Viz) of 2025, dated 18-7-2025
• Gorla Srinivasa Reddy IT Appeal No. 503 (Viz) of 2024, dated 20-12-2024 (para 9) followed

List of Cases Referred to

• Bala Krishna Traders [IT Appeal No.302 (Viz) of 2025, dated 18.07.2025] (para 5)
• Gorla Srinivasa Reddy [IT Appeal No. 503 (Viz) of 2024, dated 20.12.2024] (para 5).